Refugee migration, the economic implications

Vaughan Jones reports on a recent study

In the UK, refugees are 18.3 per cent less likely to be in employment than native-born citizens. For EU and non-EU economic migrants, the gap is 4.3 and 8.2 per cent respectively. Refugees from North Africa, the Middle East and other African and Asian countries are less likelyto be employed than economic migrants from the same areas of origin. The level of employment of refugees from the areas where the current crisis is taking place, i.e. North Africa and the Middle East, is  32.5 per cen below that of people born in the UK.

This data is the centrepiece of a short article ‘On the economics and politics of refugee migration

by distinguished economists Christian Dustmann, Francesco Fasani, Tommaso Frattini, Luigi Minale and Uta Schӧnberg.

Acknowledging the complexity of the current crisis, they recognise that an easy solution is not entirely within the control of the EU. In contrast to the time of the Balkan Wars in the early 1990s, the EU is less engaged in the conflicts that are producing refugees, and the internal political climate is now far less conducive to generosity. 

Nevertheless, the authors highlight the importance of capturing the social and potential economic capital which refugees bring. Short-term visas limit the capacity of the refugee to settle and make a new life. Whilst they acknowledge that governments can make choices on whether or not to accept economic migration on the basis of skills, it is much harder to do that when managing those who seek humanitarian protection.

They identify the need for a new regulatory framework agreeable to all member states which will replace the current failing policies. The paper proposes, as have others, coordination of processing before people are forced to make perilous journeys, and a robust and flexible allocation mechanism.

This is a stark warning. Failure to address the crisis will have a political fallout more costly than any economic consequences. There is an urgent need for institutions to tackle the fundamentals of climate change, poor governance and slow economic development in Africa, in order to prevent continued refugee flows. Ultimately, the EU needs a foreign policy which addresses conflict and instability head on.

The paper is helpful background to some of the major concerns of Migration Matters. First, we support a strong role for business in ensuring that refugees are able to contribute economically to their new country and their own families. Secondly, we recognise the complexity of migration, its inter-relationship with displacement and the need to address fundamentals rather than short-term crisis management.